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tv   [untitled]    March 7, 2011 4:00pm-4:30pm EST

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there are times in the house that we all sort of expect that with the way if we're just. now you heard that right forget the white picket fence that fannie mae and freddie mac. used to provide the american dream is quickly turning into an american nightmare so what is it that caused the system to fail. from the middle west to the mideast and even up through greece the world rebellion seems to be spreading but will politics ever close the gap. and turning profit from protests does money trunk morals when it comes to public
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relations. good evening it's monday march seventh four pm here in washington d.c. i'm lucy catherine of fans you're watching our t.v. now when it comes to the american dream visions of the white picket fences are front and center but for decades those fences have been propped up by the government's largely through fannie mae and freddie mac. of course since taking on these enterprises in the wake of the housing crisis the federal government has now started back in ninety percent of u.s. mortgages but with new proposals on the table from the obama administration the message seems clear and it's not a good one apparently this country can no longer afford to part prop up the middle class. the american dream. to be a bar room and provide for your family so we saw by the way picket fence it's that
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traditional vision of homeownership central to living the dream like so many people these days we live in the faberge which is turned into a nightmare for millions of americans who've lost their homes to foreclosure or are facing it now people like retired corrections officers on track she didn't want to show her face because of this there's a horrible feeling to be facing foreclosure you have a family having children and we try to keep things stabilize for them but she feels helpless in the fight against losing their home a situation she's in because of a dispute with the banks over the terms of her adjustable rate mortgage i do feel like it's a right the it should be my right to remain in my home i've been here for nearly twenty years but now americans like sandra they have to kiss the national eat those that says owning a home is a birthright could buy altogether in the future people may still aspire to the picket fence where they're going to a hard time getting the house that we all sort of expect go with their way of of
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just offense that's because for decades it's been two government sponsored firms propping up homeownership in the country by keeping money flowing to mortgage lenders fannie mae and freddie mac. you may recall them from the financial crisis when their losses led the u.s. government to bail them out to the tune of one hundred fifty billion dollars here in the working class neighborhood of jamaica just outside new york city you can really see what some of those losses from the housing crisis look like this two family home for example before the crisis sold for just over six hundred fifty thousand dollars now not too long ago at a foreclosure auction one hundred seventy five thousand dollars of that debt was auctioned for just two thousand dollars and with the government in control of fannie and freddie. american taxpayers stand behind six trillion dollars in mortgage debt now the government says it has to get out we need to wind down fannie
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and freddie and substantially reduce the government's footprint in the housing market it's a departure from past government policies which have treated homeownership as a virtual right and report to congress now the obama administration says the goal is affordable housing not for all americans to be homeowners analysts say alternately withhold policies and fannie and freddie going by the wayside so too will the white picket fence dream they helped manufacture it can it interest rates are going to have to go up because the risk of lending to homeowner goes up and fewer parties a want to get in on that. you know homeownership orders and it's not just the u.s. middle class that's going to feel it foreign countries all over the world hold billions upon billions of u.s. home mortgages in their portfolios doing away with fannie and freddie could amount to massive losses for these investors and for us clout especially when you consider
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economists say shoring up foreign investment was a major reason for fannie and freddie's bailout in the first place but america appears unable to afford another option in the face of such massive failure have believe the banks were making bad loans i think that any of freddie got out of control they took ridiculous amounts of rest which they didn't properly disclose to the federal governments that regulators or to their investors who were significantly slammed by their misadventure of a misadventure coming at the cost of the american dream albion apartments and i wouldn't want to be able to buy a home somewhere else that so many americans and the world. laura lister r.t. new york. all right well lauren lester our chief financial correspondent joins us right now from the new york city studios hi laura how are you doing. well let's get straight to the bottom of this i mean is the american dream as we know it bad. well it depends on what you consider the american dream if you consider home ownership
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a large part of that and if indeed fannie and freddie are done away with then there's a strong case to be made that yes it will be gone now i do want to say that it's not obviously been determined what will happen with fannie and freddie there are different options and people that i interviewed for this story did say that some are just cosmetic and the government would still be involved in subsidizing housing but there is a large argument in a large proposal being made to wind fit freddie and fannie down altogether and in that scenario it could be a lot more difficult for people to get loans it's going to be a lot more difficult to for people to own a home i mean as it is over the last thirty years wages have been stagnant and american savings we know has been extremely low now those are the things that really lend themselves to people actually being able to afford a home what we saw in the housing bubble what we saw that led up to that crisis was a lessening of standards where you know with the government propping up and subsidizing home loans and the loosening of standards many people got them that didn't have the wages to qualify nor did they have the savings so without that
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subsidy without that being propped up we're going to see a vastly changing landscape in terms of homeownership in this country i mean it doesn't sound like a pretty picture at all but lauren if we look at this in the historical context i mean fannie and freddie came out of the great depression they were specifically created to give all americans or most americans a chance of homeownership and they've been able to do this successfully for about seventy years through thirteen different presidency is so how is it that one day we just wake up and suddenly boom spectacular failure how in the world do we allow this to happen. well we didn't just wake up and boom i mean one of the things that lends to a bubble is a suspension of disbelief that everybody thought that housing prices were going to keep going on and keep going up forever obviously that wasn't the case and the housing crisis that occurred prove that was wrong and in the midst of all of that there was a lowering of standards for loans there was a lot of what people attribute to greed there was a lot of instances of fraud there was danny and freddie backing the housing programs that allowed people to get loans and to get homes that they really
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couldn't afford tons of leverage put on top of that securities made sold all over the world i mean all of this was going on to create a crisis that almost brought this country down and that affected the entire world i mean there are a lot of different factors are created a perfect storm here but i mean it really has changed the idea that homeownership that homes are now said that this is an asset that's always going to continue to rise i mean i was just speaking to the business insiders joe weiss and always saying really if you look long term at homeownership there's only been a few different periods where it's truly been a good investment where you've seen increases i mean that is kind of a myth that has really proven itself over time i mean the consequences of the wind down seem to be pretty steep if indeed this family of men. does happen i mean we're hearing that interest rates will potentially soar the the thirty year fixed rate mortgage loan which everyone that i have every one of my friends seems to have if they own a home may now be a thing of the past and yet you have geithner insisting that somehow we're going to
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magically be able to do this in a way that spares the taxpayer i mean it doesn't exactly seem to add up what's your take. well it doesn't but i think when geithner is talking about sparing the taxpayer i think he's talking about sparing them the losses of the six trillion dollars that taxpayers now stand behind and hold mortgages and mortgage securities as essentially owners of fannie mae and freddie mac. i mean the government took conservatorship of these enterprises and the government now owns and that means taxpayers own them so by getting out of fannie and freddie that means that taxpayers won't be on the line for more of these mortgages and that is what i think he means i don't think he means that everybody's going to get a home clearly with that obama administration statement doesn't sound like the government believes every american should be entitled to own a home anymore all right well you may not be on the line for any more of the homeownership but it looks like the american dream is not what it used to be that was a financial correspondent lauren lyster now if you filled up your tank this weekend chances are that you probably felt the pain at the pump and gas prices are not the
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only thing on the rise the cost of food is soaring millions of americans are still unemployed and the economy continues to shed jobs but with state and federal budgets in crisis gets what is going to be on the chopping block the basic programs that help already struggling americans make ends meet and we talked about the end of the american dream of home ownership but are we now approaching the end of the american way of life as we know it but the answer would turn to david de graw from am status dot com hi david can you hear me how are you. doing all right well before we get to the big picture discussion i really want to stick with the topic of fannie mae and freddie mac. for a moment you know like many things that the u.s. government does fannie and freddie started out with the best of intentions helping americans who pay for a home right i mean it sounds like this great amazing thing but unfortunately like most government programs it seems that a few people have found a way to cheat the system and so quickly we see the american dream went from being a dream to the american scam now you see the push to end fatty and freddie do you
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see this at all as an admission maybe by the powers that be the system is essentially screwed. each year well i mean obviously you know who wants to put so much forwards in the system that brought the house market down you know i mean it's wrong you want to talk about on foreign fannie and freddie you know let's talk about it on wrong people who proposed this problem bank of america would go to saks . and when i talk about winding them down user you know shore journal instance you shouldn't is that exploded that i was you. think that riveted the column. we should be unwinding to have. various well yeah i mean why aren't we unwinding then you have someone like bradley manning who got in trouble for leaking secrets and is now you know facing potential death penalty who is now spending twenty three hours of the twenty four hours in a day in solitary confinement and i have not seen a single washy thing not a single u.s. official behind bars for essentially running the economy into the ground and how do you reconcile that well i mean you know it's one giant mafia racket now
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wall street who can't gain finances taking control of both the democratic and republican parties it's legalized political rivalry just like you know legalize rico racket in the housing or it will be the criminals that so you know and if there are obviously it will look the criminals that they have if the criminals have taken over let's talk about the money we have one hundred fifteen one one hundred fifty billion that went into bailing out fannie and freddie from uncle sam i mean somebody got rich from all that crash cash whose pockets that money go to and where what what against any returns on this. war i mean just look at people like cain also didn't really quite find jane i mean i mean these people cashed in on this thank also and was hit rule in every level you know out of taking down the u.s. economy you guys were billion dollars now that we know about it really has to close
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you know what sure counts you know these are the people that have to have their assets frozen and we can recoup the money that way i mean one tenth of one percent of us here we should as rob everyone right now we have three four hundred people in the united states we have more wealth in a hundred fifty five million people combined is the most superior any quality of wealth you ever had if americans could just understand how this world has been with us if there's one tenth of. that then we would have egypt you know. it's easier in luke to. united states or not. you know it's all well let's get to egypt let's get to some of the similarities between the united states and care abroad when you look at this clear divide that what the lighting gap between the rich and the poor that you just brought up i mean it seems that there are more and more places in this country but there are popular uprisings going on even right here in washington d.c.
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i mean as they're speaking right now there are hundreds of nurses who are locked out of their hospital there on strike they're fighting to hold on to their salary isn't for better working conditions and take a look at this quick quick story that r.t. correspondent christine for us our put up. it is a rising tide spreading across the globe. as the angry the oppressed are fighting back against the oppressors in egypt a leader was taken down in libya he hangs on but barely in greece as many as thirty thousand protesters came out last month angry at the ongoing austerity measures imposed by the government there in portugal it was the same thing and in this country wisconsin remains at the crux of a fight described by many as the battle between the haves and have nots or the governor wants to take away collective bargaining rights of public workers well it
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turns out it's not just people whose job it is to protect and serve americans. it's also those whose job it is to care for americans these nurses here work for the largest hospital in washington d.c. it also has a level one trauma unit which means many of the patients they get are in the most serious condition they say the company that runs the hospital medstar is operating on the cheap not only not wanting to give these nurses raises but also wanting to leave greece their pay or if they meds are also severely understaffed the hospital and in the end it's not just the nurses the patients will suffer the nurses have about six patients expression late at night sixty eight patients that's way too many these patients cannot move do not get out of bed do not walk around and i think there's a huge problem of safety. they've been without a contract for nine months and are locked out of the hospital as other nurses had to be bussed in to care for the patients here are the stars some say the most
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frustrating thing is the sharp differences in those who run the hospital from the board room and those who actually run it from the emergency room and patient rooms traditionally c.e.o. patches in and. wages are about three hundred times the average what the average worker makes and it's the average worker that's put the product on the street that's put that's doing the doing the job and it's just amazing that that corporate profits of come in front of work or welfare corporate profits versus worker will fare you could say it sums up most of the major conflicts but at what point are words not enough stunning pictures. even angry lawmakers this is an important moment in history this is a moment where we must stand up and speak out and speaking out the increasingly o.-r. but will those speaking now whether in wisconsin in egypt or on the streets of d.c.
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achieve a fundamental change in the system in washington christine freeze out our tea. now david here in washington and in the mainstream media i mean it kind of think that we tend to look at things in isolation but when you look at what happened in greece months ago when you look at the uprisings in the middle east and in northern africa and we look right here at home with the labor movement uprisings there are connections to be made there i mean we're all essentially reacting to the same forces the growing income divide the the income inequality the rising fuel and food prices talk a little bit about how these disparate movements are actually connected at the root . everyone of these protests that you surely are all against the same thing a neo liberal economic policy you know century and plans through the federal reserve through the i am out you know whether people in egypt and people in wisconsin understand that these are called will systemic economic policies created
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by a century plant and you'll rue aristocracy i mean that this is the way the global economy works you know once people start connecting this and realizing that you know look look at egypt for example look at the every belly against goldman sachs and change and we're going to see i.m.f. talk over their country and see thousand of were implemented through all these economic policies then allow again and their ability because they can't get jobs they can't put food on a table and i think people have people are reacting to very specific things apply to their everyday lives i don't know if you can go and make that connection as apparently that's part of the economic policies that are put in place the neo liberal economic policies increased unemployment the increased party increase the price of food you know that they make in the cessna's harder to get to these are systemic global policies and these people react they can't be can't afford to eat they can't you know they don't have any jobs these people are fighting for survival essentially and it is all done for economic policy it's really i.m.f.
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and the federal reserve quantitative easing because the price of fluid to rise around the world it's not wasn't the only cause but a piece that we threw gasoline all over the fire and this is why people are trying merrily rebel but the unemployment high isn't that it's these are sensually planned economic policies that affect everyone in the united states egypt sneezer greece all through your this this is what's happening this is an eighty century wise call rebellion against your liberal economic policy but a global rebellion a way indicate some sort of potential change and unfortunately i think history has shown time and. over and over and over again that people taking to the streets doesn't necessarily translate to the actual system being reformed i mean i would go on and take a bet right now that in about a month we're not going to be talking about the labor movement anymore you know once the pictures are out there and done i don't think our attention is because they focus on that this was just such a high level sucker and now you know it we're all the declining resources are going
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to stream where they are and these these centrally planned economy just trying to loot you know way beyond anything else. it's not the state you know i mean just look at the united states million people who want to i don't care if you are with poverty thirty million or and you work your level of suffering is going to keep increasing so you know you have to be concessions it'll be a long battle doubt about that but as time passes more and more people are going to be fighting we're sort of so this is not something that's going to end anytime soon but you know you know just these changes which you know from somebody you know most were even if you are. you know whatever the republicans throughout you know those moves are going to suffice and world people you know it can't afford to have any decent lives all right david well i think we have a lot more to talk about it but unfortunately we're out of time here and i have to
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say you're much more of an optimist then i that was author and journalist david i prob now the director of a top u.k. university has quit over the institution's links to libyan leader moammar gadhafi regime this after revelations that the london school of economics was involved in lead intonations worth millions of dollars now with the latest scandal in a string of reports of dirty cash inflow trading the u.k. from dictatorships in the arab world as artie's laura and it reports a london p.r. firms are cashing in on the unrest. the influence of p.r. companies in distorting the truth is well known in hollywood movie wag the dog a p.r. agent engine is a war to distract from the president's plan during the debate to show the world the country. think of and sometimes truth is stranger and much more damaging than fiction spin has been crucial in middle eastern politics for many many years i mean spin is what took britain into the iraq war for example
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crass headlines about weapons of mass destruction and in forty five minutes p.r. industry experts reckon the majority of the arab states in turmoil bahrain egypt libya have some kind of representation in a london p.r. firm and the reason they come here and that kind of regulation while in the u.s. if a p.r. company takes on a foreign government it has to register the fact with the department of justice in the u.k. there's no such rule. if you're a foreign government looking for representation in london look no further than bellhops india based in the building behind me although very cagey about who its clients are it's believed to represent the bahrain bellary and exiled russian tycoon bodies but he's got to keep the facts also you've been writing to journalists in recent days on behalf of the member of the libyan royal family it's all based certainly representing government elsewhere in the region tell potent declined to give us an interview for this story but they've assured r.t.
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in the past the p.r. can influence questionable regimes for the better a country frequently modify. its actions and its policies in order to achieve. what the sometimes. having better relations with whoever they're looking to improve on so it's a balance but that doesn't always happen libya for one has used london's p.r. machine before with misleading results in one thousand nine hundred five u.k. based. our agency was paid four million pounds to try and subvert the evidence that pointed towards libyan involvement in the lockerbie case and this is what has led to all sorts of alternative theories about lockerbie although of course all the evidence to point to the fact that i am a grotty in london female were actually responsible so libyan knows how to play by these rules they know how to play the game and it's transparency that's lacking in u.k. p.r. information appears in the media but people have no idea who put it there and the
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only way one can be really sure about all the information that we're being bombarded with on a daily basis is where does it come from and is that person hostile or impartial and in that way we get a much clearer idea of what it is that we're being told although there is a new body in the u.k. designed to break the late p.r. industry declaring clients is still called a tree london's soho is the heart of the p.r. industry in the capital where images of burnished and the palatable becomes palatable to london's top p.r. firms are known to be working on declared for some of the world's most unpopular regimes but their expertise could be being used to shape the future political landscape of a vulnerable region nor emmett's r.t. london. they wandered off again trying to improve his image in the last few were announced weapons of mass destruction and over suspects in the lockerbie bombing and hired us spend doctors to lobby congress and sway american opinion now that office flaps on k.
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street have including the livingston group and the law firm white and case but should we really be surprised when from equitorial guinea to saudi arabia k. street lobbyists often buff tarnished reputations let's settle it political p.r. moves so does money trump morals when it comes to public relations and the answer we're turn to graham was in our he's an attorney with the firm patton boggs so how does this process work as someone who has seen it firsthand i mean do you put a dollar figure on i don't know a leader who takes foreign aid and funnels it for his own purposes somebody who perhaps murders innocent people in his country i mean how do you decide whether to take on a client and how do you deal with a moral object that well that's well i think you do a multifaceted analysis of every client because your reputation is at stake is will and there are certain people out there who do seek help in washington from lobbyists and oftentimes they are human rights record so tawdry that it is impossible to cleanse them and no one wants to get involved in that game as well if
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you go into the state department and make a case for a human rights abuse or and don't fully revealed the depths of those problems you'll be left out of the state department so you have to recognize that there are certain ranges in which you can operate no other countries larger countries that have very large commercial and other interests are much more appealing to a lobbyist. he has the ability not only to improve the image of the country in the in front of congress but also to try to find new markets to try to open up all sorts of joint ventures between the united states and that country but again you you can't paint a pig by a different color and expect that you're going to trick anybody in the state department to get it seems to work i mean look at the case of saudi arabia which our firm firm deals with i mean this is not a democratic regime by any means whatsoever this is a country that has
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a lot of questionable connections and yet you hardly ever see a negative word about the saudis from either their politicians or the mainstream press i mean if they had a pretty pretty good job of polishing their image when it comes to yes well i can't speak for this particular client because obviously it's confidential but saudi and other countries that have a long term relationship with the united states frequently do come under criticism we all make mistakes in the saudis have done so in the past and you just try to face up to the truth of the accusations and try to understand them try to understand what congress the questions congress is asking and bring it back to riyadh or bring it back to another capital in and see if you can find a common ground in which people can understand each other so i guess at that moment relationship is that enough that's what's worth fighting well i i do not take the representation of countries which have blood on their hands. i think
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a pretty good reputation in this town and i know that there are every country including our own has made mistakes in the past and they deserve as we say a day in court congress and the staff on capitol hill are very shrewd and they can tell in a second if i am overplaying my cards i would hope so but you know if you look at for example the difference. i mean i don't know a terrorist and a freedom fighter is really just p.r. right and in this world of mass media image is everything image becomes perception becomes reality and we've seen it with corporations for example constantly being able to reach if their image regardless of what sorts of crimes are committed and so i guess the question is should we really be surprised at the end of the day you know p.r. and lobbying and these efforts to rejig someone's image take place and often incorporate a government that we may not be. perfectly friendly well i don't suppose you should
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be surprised the governments that have a bad image do come to the united states and they look for lawyers who will take their case but as i've said before those of us who are serious about the business are in it for the long term and so we're not going to associate ourselves with people who are records which just can't be explained there are other countries which have mixed records and some of them are coming to united states to understand how to get out of trouble washington is a five dimensional chess game there are many power brought brokers in this town and foreign governments frequently don't know who's really on first base is the defense department is the state department and therefore in many ways you're holding their hand through this labyrinth of power well and hopefully that hand is clean at the end of the day thank you so much that i think you know mr attorney with the firm that involves and from turning profit from protests to why journalists may be adding fuel to the libyan fire r.t. correspondent oksana boy.
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